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CEOs defend moving jobs offshore at tech summit

By , IDG News Service
October 09, 2003 04:10 PM ET

IDG News Service - WASHINGTON - Moving IT jobs outside of the U.S. is necessary if technology companies want to remain competitive in a world market, a group of software vendor CEOs said Thursday.

Most of the 11 CEOs defended moving some IT jobs outside of the U.S. during a panel discussion on "the next wave of innovation" at the Business Software Alliance's Global Tech Summit in Washington, D.C. Moving low-level IT jobs outside the U.S. doesn't take away jobs from U.S. workers, argued Tom Noonan, chairman, president and CEO of Internet Security Systems Inc., because outsourcing allows cost savings and drives companies to focus their U.S. workforces on higher-paying IT jobs.

"The economic advantage is created by accelerating more jobs here in the U.S. because you move the day-to-day labor offshore," Noonan said. "This is not a displacement of jobs, in our mind; this is an enabler of good jobs."

Panel moderator Lou Dobbs, a CNN anchor, questioned whether moving IT jobs offshore was simply about companies trying to pay the lowest possible wages. Art Coviello, president and CEO of RSA Security, said he worried about the political fallout over moving jobs from the U.S. to other countries.

"I absolutely think it's driven by the short-term profit margin," Coviello said. "But I think the unintended consequence is innovation." As low-wage jobs go overseas, the U.S. has been forced to invest in higher-wage, more innovative industries such as biotechnology and health care, Coviello added.

Moving IT jobs offshore, and the number of visas allowed to IT workers coming into the U.S., are becoming a hot debate in Washington this year, as Congress considers whether to raise the number of H-1B visas allowed for 2004.

Driven by a stagnant economy and concerns over security, some state legislators across the U.S. have also tried to stop the relocation of jobs by introducing bills prohibiting state governments projects from using offshore IT workers.

But the CEOs on the panel said the offshore moves provide several benefits, including access to highly skilled employees who want to work. "Those of us who are first in India, for instance, are seeing masters-degreed engineers that will do call-center work," said Carol Bartz, chairwoman, CEO and president of Autodesk. "We're seeing people eager to have these jobs, not just showing up. Sure, it's cost cutting, but we are seeing very high-quality labor - let's not diminish that."

Other IT CEOs on the panel argued that moving IT jobs is necessary in a global market, where 50% or more of some software companies' sales are outside the U.S. The biggest fear that some IT CEOs have is that foreign markets will close their borders to U.S. products, said Gregory Bentley, CEO of Bentley Systems. U.S. companies hiring workers in countries outside the U.S. encourage those countries to be open to U.S. products, he said.

While about two-thirds of his company's 1,500 jobs are in the U.S., jobs in Pakistan help create a stable and U.S.-friendly economy there, Bentley added. "There are some jobs that can't be done at U.S. wages," Bentley said, "All those (U.S.) jobs are at stake if we lose foreign markets. The long-term view is that it's essential for the growth of software to have global markets remain open markets."

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